Performance Property Management would like to take this opportunity to update our property owners on some updates with the Ontario Housing Market that were released yesterday.
This morning Kathleen Wynne, the Premier of Ontario, made an announcement to “cool the hot Toronto housing market”. As she mentioned, there will be a number of significant measures undertaken that address; purchases by foreign buyers, rent control, affordable rental development, standardized leasing, pre-construction assignment purchases, conduct of Real Estate Agents, and vacant home tax.
We have included below a few of the major aspects, and what they mean for you as a current owner:
- A 15 per cent tax on home purchases by non-resident foreigners in Toronto and the Greater Golden Horseshoe. Wynne said the new tax would not apply to new immigrants who plan to live here but speculators who will “never set foot in Ontario.”
- This will only apply to those of you who are non-residents, and plan on purchasing more property within the Golden Horseshoe, which encompasses as far north as Barrie, the GTA, Hamilton, and as far south as Niagara to the U.S. border. Any purchasers that this applies, to will also be able to get a rebate if they stay in the country.
- Expanding the province’s existing rent control system to cover all tenants, including those in buildings built AFTER 1991.
- When this comes into effect, it will mean that tenant increases will be capped at the guidelines set out by the RTA (Residential Tenancies Act), which is tied to the rate of inflation. The annual rate for 2017 is 1.5%.
- A rebate of development cost charges to encourage more rental housing buildings.
- This is an effort to increase the construction of more affordable rental housing, thereby supply.
- A standardized lease document for all tenants.
- Other provinces currently have this, but it is intended to keep clauses out of leases that are harmful to the tenant. Since Performance Property Management’s leases are based on the ones provided by the Landlord & Tenant Board, there should not be any significant changes to you for this item.
- A ban on flipping of pre-construction units by speculators.
- This is made to address those pre-construction buyers who purchase large swaths of units (on assignment) and sell at a later date for a profit. Many developers already attempt to prevent this, however Wynne is attempting to standardize this.
- A review of the rules governing the conduct of real estate agents.
- More specifically this is to address Multiple Representation in Real Estate Agents. The idea that an agent representing both the seller and the buyer of a unit can often times be seen as a conflict of interest in some Provinces, and can also be viewed as fuelling bidding wars.
- New powers for Toronto and other municipalities to introduce a tax on vacant homes to encourage owners to sell or rent unoccupied units.
- As there is an apparent glut of vacant units in the city, this is meant to pressure the owners of vacant units to rent them out, thereby increasing supply of rental housing.
- A move to identify provincially owned surplus lands that could be used for affordable and rental housing development.
- This is meant to increase the supply of government owned rental & affordable housing.
- A $125-million, five-year program to encourage the construction of new purpose-built rental apartment buildings by rebating a portion of development charges.
- Again, this is meant to incentivize the construction of purpose-built rental apartment buildings on a large scale.
As you can see, these changes have been implemented to increase the supply of affordable housing, and to protect tenants from significant increases in rent. At the same time these rules incentivize people to build more rental homes, which would be a benefit to you if you had this in mind.
Below are two articles that touch on what I’ve mentioned.
If you have any questions, comments or concerns about how this may affect your individual situation, please don’t hesitate to give Performance Property Management a call. If you have questions that pertain to the purchase or sale of yours or other properties, we can certainly assist in that regard. Furthermore, Performance PM has opened a Real Estate Brokerage to better serve your needs!